It is well known that Iraq is fighting a horrible battle with ISIS for control of the country……there are many problems encountered like the cost of the war, money for rebuilding infrastructure, etc…..and so far their oil production even with the war raging is up for FY 2015 so far……

Iraq’s crude oil production climbed to an all-time high of 4.18 million barrels a day in July, according to statistics from the International Energy Agency (IEA).

This was up from the 4.15 million bpd produced in June.

The southern oilfields accounted for exports of 3.06 million bpd, up about 40,000 barrels from June.

Then there is the cost of 36 American war planes scheduled to be delivered to Iraq in the very near future……

Lockheed Martin Corp this week will deliver the first of 36 F-16 fighter jets to Iraq, marking what Baghdad‘s envoy to the United States called a “new chapter” in his country’s ability to defend its vast borders with Iran and other neighbors.

Iraqi Ambassador Lukman Faily will travel to Lockheed’s Fort Worth, Texas, plant on Thursday for a ceremony at which Lockheed and the US government will formally deliver the first F-16 to Iraq.

Baghdad has also signed military contracts with Russia and the Czech Republic, among others, and has said it will not be able to fully defend its airspace until 2020.

Iraq also plans to buy Boeing Co Apache helicopters and other weapons from the US government as it assumes responsibility for its own defense and counterterrorism efforts.

Faily said the US government appreciated the urgency and scale of the challenge that Iraqi is facing given continued and mounting strife with insurgents.

(Who is flying these planes since the Iraqi Air Force is damn near non-existent?)

All that makes perfect sense….Iraq is trying to buy its way to success against ISIS….but then a recent development made me a bit apprehensive…..

It appears that Iraq may be near to bankrupt…….

Iraq’s ability to fight Islamic State extremists who control roughly a third of the country is hampered by a financial crisis that’s left the Baghdad government operating “hand to mouth,” Iraqi Ambassador Lukman Faily warned this week.

The inability to pay salaries on time to the soldiers and militiamen fighting the Islamic State, also known as ISIS or ISIL, has hurt morale and hindered progress in operations to retake key hubs that were captured by the jihadists, Faily said in an interview Thursday. And belt-tightening measures such as consolidating government ministries threaten to exacerbate ethnic and sectarian tensions by upsetting the delicate power-sharing quota system that’s been in place since the U.S.-led occupation authority took charge following the invasion of 2003.

If Iraq is running production at all time highs then why is it in so much financial trouble?  My guess…..the PSAs.  Production Sharing Agreements (PSA)…..a way for oil companies to screw the host country out of a share of the profits…..in other words oil companies among others are leading the way to Iraqi bankruptcy.

In case you would like more info on the PSAs….I covered it back in 2007….

Source: Who Gets Iraq’s Oil? | In Saner Thought

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